William Bonello • Craig-Hallum Capital Group LLC

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President and CEO Sam Raha outlined several competitive advantages. He cited Myriad's strong reputation, trust, and existing access to thousands of healthcare providers who prefer to consolidate testing with a few key partners. He also highlighted the ability to provide a unified report, which simplifies interpretation for molecular tumor boards, and a strategic focus on areas with clear differentiation, such as its ultra-sensitive MRD assay for low-shedding tumors in breast cancer.

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CFO Kevin Feeley outlined a seasonal dynamic, expecting Q4 to be the strongest quarter, with roughly 54% of the second-half volume occurring then. He reinforced confidence in the ramp, attributing it to accelerating growth from the core outpatient business, the maturation of new indications, the initial impact from pediatric immunologists, and increasing same-store sales.

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CFO Kevin Feeley explained that the Q1 volume dip aligns with historical industry seasonality due to deductible resets and was exacerbated by severe weather and one fewer sales day. He reaffirmed the full-year growth guidance of over 30%, driven by a planned second-half ramp in NICU services. Feeley attributed the G&A increase primarily to the Epic integration, which costs about $5 million annually, and other growth-related support costs, stating the business model remains highly leverageable.

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CEO Katherine Stueland detailed the expansion of the enterprise sales team from 5 to 10 reps and the hiring of about 25 inside sales reps to support the outpatient team, emphasizing a focus on productivity. CFO Kevin Feeley added that the Epic integration is the single largest investment and that profitability would be near breakeven in Q1 before ramping. He stated the commitment is to remain profitable while retaining the latitude to invest to accelerate growth in new markets.

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CEO Katherine Stueland detailed a multi-faceted strategy for pediatric neurologists, including direct sales efforts, education on improved turnaround times and reimbursement, and leveraging guidelines from the American Epilepsy Society. She noted current penetration is ~12% and the goal is for every pediatric neurologist to use their testing for children with seizures. Regarding the NICU, she stated that while they are actively driving volume today, the Epic Aura integration is a key catalyst expected to begin accepting orders in H1 2025 and ramp revenue in H2 2025.

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Executive Christopher Hall stated they are intentionally 'metering' growth to manage pre-reimbursement costs but have exceeded their 30-40% quarterly growth target, recently hitting over 50%. Executive Aaron Tachibana added that Tempus is accelerating new physician acquisition, while Personalis's smaller team is driving high retention and subsequent sample volume. Hall emphasized the strategy is a collaborative effort designed to optimize the customer experience, sometimes directing customers to the Tempus platform for its EMR integration.

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Co-Founder and CEO Jurgi Camblong and President Ross Muken explained that implementation speed has improved due to new tooling, automation, process industrialization, and select headcount increases in field application scientists. Regarding enterprise sales, they confirmed it means customers adopt the SOPHiA DDM platform for a majority of their NGS testing needs. This trend is driven by market complexity pushing labs to consolidate on a single, efficient platform, a dynamic SOPHiA is actively targeting with its go-to-market strategy.

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President Ross Muken explained that Q4 volumes were in line with internal forecasts, representing a normalization after a stronger-than-expected Q3. He also cited weakness in Latin America due to a since-recovered customer churn as a drag. Muken emphasized the record 35 new customer implementations in Q4 as a key indicator of future reacceleration. CFO George Cardoza clarified the 2025 guidance assumes a "fairly flat ASP," with projected revenue growth being almost entirely "volume-driven."

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Co-CEO Helmy Eltoukhy explained that the new tissue test's key advantages are its low tissue requirement and its unique methylation backbone, which provides richer data and synergizes with the entire product portfolio. He stated that ordering both liquid and tissue tests will likely become the standard of care and that offering a leading tissue product grows the overall pie for Guardant rather than cannibalizing existing tests.

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Co-CEO AmirAli Talasaz confirmed that Guardant is in very early conversations with commercial payers, primarily through advisory boards. He stated that these engagements will ramp up more significantly after a potential inclusion in American Cancer Society (ACS) guidelines, which the company is optimistic could occur in 2025.

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Co-CEO AmirAli Talasaz confirmed that Guardant Health will maintain its financial discipline, capping Shield investments at approximately $175 million for the current year and around $200 million for following years, regardless of the favorable pricing. He noted that while USPSTF guidelines are a major milestone for broader commercial access, the currently covered market is very deep, and the company will also leverage American Cancer Society guidelines which can influence state-level mandates.

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CEO John Hanna explained that improving revenue capture involves operational excellence, such as optimizing appeal letters, timely filing, and using system workflows more effectively. He confirmed the billing system is capable and has been upgraded. Regarding the KOAR study, Hanna described it as a large, prospective, multicenter study designed to demonstrate AlloSure Kidney's efficacy in detecting rejection and guiding physician management to improve biopsy yield, not necessarily to avoid biopsies.

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CFO Abhishek Jain clarified that Q3 revenue included $2.2 million in one-time items across Testing Services and Digital Solutions; excluding these, Q4 shows underlying growth. Jain explained that after removing $14 million in one-time revenue from the 2024 forecast, the underlying growth rate is 12-13%, aligning with the low-teens projection for 2025, with growth expected to accelerate in subsequent years following investments.

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CFO Aaron Bloomer confirmed the directional math was not far off from their guidance assumptions. He emphasized that care gap programs are a key channel for acquiring new patients, and the company is also targeting the younger 45-49 age group with new marketing efforts to grow the first-time screener base over time.

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CFO Aaron Bloomer confirmed the analyst's directional math was reasonable. He emphasized that care gap programs are a primary channel for acquiring new, first-time screeners and that the company is increasingly targeting the younger 45-49 age demographic through these programs and new marketing efforts to drive growth in this population.

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Chief Executive Officer Brian Blaser attributed the improved margin outlook to successful staffing reductions and significant traction in procurement initiatives, while reaffirming the long-term goal of over 25% EBITDA margin. He specified that indirect savings span logistics, packaging, T&E, and service costs. Chief Financial Officer Joe Busky explained the sequential gross margin decline was due to a less favorable product mix, with lower respiratory sales in Q4 than in Q3.

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CFO Joe Busky attributed the Q4 EBITDA drop primarily to a ~30% YoY decline in high-margin respiratory revenue and a ~$25-30 million increase in SG&A from a bonus accrual absent in the prior year. CEO Brian Blaser explained the organizational changes were made to flatten the structure and improve efficiency, with no direct impact on customer-facing teams.

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CFO Kevin Green explained that while positive operating cash flow was a key goal achieved in 2024, rebuilding working capital will be a focus in 2025, offset by business growth. He confirmed a significant majority of R&D is BARDA-funded and identified future cash uses as working capital, COGS-related CapEx, and geographic expansion.

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